Shooting first and asking questions later can be costly’

Shooting first and asking questions later can be costly’

Melbourne University Publishing Ltd and Others v Williamson [2005] FCA 1910, 20 December 2005.

The Federal Court has recently denied costs relief to a plaintiff who issued proceedings without first sending a letter of demand.

Facts

The respondent operated a photocopy shop, which displayed notices at each copier informing people of copyright infringement. The notices warned that any infringement was at the person’s own risk. The applicant publishers sued the respondent for infringement of copyright in a number of literary works and published editions. Consent orders provided for judgment against the respondent on the issue of infringement. The applicants sought costs from the respondent on a party – party basis.

Importantly, the application was served without notice, i.e. not being preceded by a letter of demand. Immediately upon service of the application, the respondent sought advice and was advised to take the course of action reflected in the consent orders. As a result, the respondent claimed that there should be no order for costs. Conversely, the applicants submitted that if it had served a letter of demand, it may have amounted to an unjustified threat under section 202 of the Copyright Act.

The decision

Heerey J found in favour of the respondent:

“.. it is widespread and salutary practice in all forms of civil litigation for a prospective plaintiff to write a letter of demand, for the very reason that a prospective defendant can take advice and, if there if no defence save the substantial costs that would be involved even for a brief undefended application like the present one. I do not think that there was any real prospect of the applicants infringing the provision against unjustified threats because ex hypothese their threats would have been justified since there seems to have been no answer to the copyright infringement claim”

No orders for costs were made.

Implication

This decision illustrates that there is greater likelihood of obtaining costs orders in a proceeding where a letter of demand has been sent before proceedings are issued. However, it is important to remember that in some circumstances it may be inappropriate, or impractical, to send a letter of demand, such as where a party is seeking an Anton Pillar order or other ex parte relief. In any event, if a letter of demand is sent, care should be taken to ensure it does not contain any unjustified threats.